Little Orphan Fannie Mae

Washington rewrites financial-crisis history to punish J.P. Morgan.

Updated Oct. 27, 2013 7:00 p.m. ET

The government assault on J.P. Morgan Chase is an injustice for many reasons, but the case has now reached tragicomic heights with the bank's agreement on Friday to pay $5.1 billion for supposedly conning Fannie Mae and Freddie Mac. So the government-favored mortgage giants that did as much as anyone to foment the housing bubble and bust are now presented as victims.

The premise of the allegations settled on Friday is that while it may appear that Fan and Fred were recklessly gambling on the housing market for years before...